Residency through passive income or pension: Is Spain or Portugal better?
Spain's non-lucrative visa and Portugal's D7 visa are both designed for non-EU citizens to be able to live in these Iberian countries and are ideal for pensioners, but how do they compare? Which is easier and offers more benefits?
Spain's non-lucrative visa, also known as the NLV, is an authorisation that allows non-EU foreigners to stay in Spain for a period of more than 90 days without working or carrying out professional activities in Spain, such as retirees, by demonstrating that they have sufficient financial means.
Portugal's D7 visa provides residency status in Portugal to non-EU citizens, including retirees, who receive regular passive income.
While they both sound similar at the outset, they are quite different when it comes to the requirements and what they offer.
Here's a breakdown on Spain's NLV vs Portugal's D7.
What are the income requirements?
NLV: For Spain’s NLV, in 2022 you must prove that you have a passive income of €27,792 per year. This number usually rises yearly as it must be 400 percent of the IPREM, so if you’re planning on applying in 2023, you’ll have to budget a little more.
READ ALSO: What are the pros and cons of Spain's non-lucrative visa?
D7: For Portugal’s D7 visa, you only have to prove that you have 100 percent of the minimum wage which is currently €7,620 per year. Portugal wins hands down in this case as you’ll have to have at least €20,000 more per year if you want to move to Spain.
Can I include family members?
NLV: Yes, the NLV allows you to bring dependent family members such as a spouse and children, however, you will need an extra €6,948 per year for each family member included.
D7: Portugal’s D7 also allows you to bring family members, but again it’s a lot more affordable than Spain’s NLV. You can bring your spouse or your dependent parents for an extra €3,810 per year and your children for an extra €2,292 per year.
Can it be renewed?
NLV: The NLV visa is a one-year visa, but it can be renewed for a further two years and then another two years after that. After five years of residency, you are eligible to apply for long-term residency and won’t have to keep renewing your NLV.
D7: The D7 is initially valid for two years, unlike the NLV. Afterward, you’ll be able to renew it for an additional three years.
Can it lead to citizenship?
NLV: Yes, you can eventually apply for Spanish citizenship after 10 years, but you will need to apply for long-term residency first.
D7: Yes, after you have five years of residency, you are able to apply for Portuguese citizenship, this is half the time that it would take in Spain.
Do I have to pay tax?
NLV: Yes, if you stay more than 183 days in Spain you will become a tax resident and will have to pay tax on your worldwide income. It’s worth remembering, however, that there are double tax agreements with certain countries meaning that if your passive income has already been taxed in your home country, you won’t be taxed again in Spain.
D7: Like in Spain, once you have lived for more than 183 days in Portugal you are subject to paying tax rates there, however, Portugal offers a special Non-Habitual Resident (NHR) status, which you can apply for if you have a D7 visa. This special tax regime offers free incentives and reduced tax rates for some for their first 10 years in Portugal.
Can I work with these visas?
NLV: No, as the name suggests, it’s a non-lucrative visa and you shouldn’t be working in Spain, even if your employer is based abroad. After your first year though you are able to exchange it for a work permit or to become self-employed (autónomo) through a process called residence modification.
READ ALSO: Should I change my non-lucrative visa for another residency permit in Spain?
D7: Like the NLV the D7 is only supposed to be for passive income and you do not have the right to work in Portugal, however, if you later apply for a residence visa, then this restriction will be lifted and you will be allowed to work.
Do I need private healthcare?
NLV: Yes, you will need to apply for private health care in Spain in order to apply for the NLV. Surprisingly private healthcare can be very affordable in Spain at around €50-200 a month and the services are very good.
D7: Portugal’s D7 also requires you to get private health insurance. Private health care in Portugal can be slightly cheaper than in Spain at between €50 to €100 per month.
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Spain's non-lucrative visa, also known as the NLV, is an authorisation that allows non-EU foreigners to stay in Spain for a period of more than 90 days without working or carrying out professional activities in Spain, such as retirees, by demonstrating that they have sufficient financial means.
Portugal's D7 visa provides residency status in Portugal to non-EU citizens, including retirees, who receive regular passive income.
While they both sound similar at the outset, they are quite different when it comes to the requirements and what they offer.
Here's a breakdown on Spain's NLV vs Portugal's D7.
What are the income requirements?
NLV: For Spain’s NLV, in 2022 you must prove that you have a passive income of €27,792 per year. This number usually rises yearly as it must be 400 percent of the IPREM, so if you’re planning on applying in 2023, you’ll have to budget a little more.
READ ALSO: What are the pros and cons of Spain's non-lucrative visa?
D7: For Portugal’s D7 visa, you only have to prove that you have 100 percent of the minimum wage which is currently €7,620 per year. Portugal wins hands down in this case as you’ll have to have at least €20,000 more per year if you want to move to Spain.
Can I include family members?
NLV: Yes, the NLV allows you to bring dependent family members such as a spouse and children, however, you will need an extra €6,948 per year for each family member included.
D7: Portugal’s D7 also allows you to bring family members, but again it’s a lot more affordable than Spain’s NLV. You can bring your spouse or your dependent parents for an extra €3,810 per year and your children for an extra €2,292 per year.
Can it be renewed?
NLV: The NLV visa is a one-year visa, but it can be renewed for a further two years and then another two years after that. After five years of residency, you are eligible to apply for long-term residency and won’t have to keep renewing your NLV.
D7: The D7 is initially valid for two years, unlike the NLV. Afterward, you’ll be able to renew it for an additional three years.
Can it lead to citizenship?
NLV: Yes, you can eventually apply for Spanish citizenship after 10 years, but you will need to apply for long-term residency first.
D7: Yes, after you have five years of residency, you are able to apply for Portuguese citizenship, this is half the time that it would take in Spain.
Do I have to pay tax?
NLV: Yes, if you stay more than 183 days in Spain you will become a tax resident and will have to pay tax on your worldwide income. It’s worth remembering, however, that there are double tax agreements with certain countries meaning that if your passive income has already been taxed in your home country, you won’t be taxed again in Spain.
D7: Like in Spain, once you have lived for more than 183 days in Portugal you are subject to paying tax rates there, however, Portugal offers a special Non-Habitual Resident (NHR) status, which you can apply for if you have a D7 visa. This special tax regime offers free incentives and reduced tax rates for some for their first 10 years in Portugal.
Can I work with these visas?
NLV: No, as the name suggests, it’s a non-lucrative visa and you shouldn’t be working in Spain, even if your employer is based abroad. After your first year though you are able to exchange it for a work permit or to become self-employed (autónomo) through a process called residence modification.
READ ALSO: Should I change my non-lucrative visa for another residency permit in Spain?
D7: Like the NLV the D7 is only supposed to be for passive income and you do not have the right to work in Portugal, however, if you later apply for a residence visa, then this restriction will be lifted and you will be allowed to work.
Do I need private healthcare?
NLV: Yes, you will need to apply for private health care in Spain in order to apply for the NLV. Surprisingly private healthcare can be very affordable in Spain at around €50-200 a month and the services are very good.
D7: Portugal’s D7 also requires you to get private health insurance. Private health care in Portugal can be slightly cheaper than in Spain at between €50 to €100 per month.
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